Mexico: AT&T buys Iusacell, now competes head to head with America Movil in Mobile and TV

What: AT&T will acquire Mexican wireless company Iusacell , the third largest mobile operator in Mexico, for US$2.5 billion including its' debts.Why it matters: This is something AT&T has been attempting to do ever since communication laws were reformed at the beginning of the new president's Pena Nieto's mandate. It will not only increase its presence in the country but create a single network in North America, targeting approximately 400 million consumers.

The transaction is expected to close in the first quarter of 2015.AT&T has entered into an agreement with Grupo Salinas to acquire Mexican wireless company Iusacell, the third largest mobile operator in Mexico, for US$2.5 billion, inclusive of Iusacell debt.
With this agreement, AT&T will acquire all of Iusacell’s wireless properties, including licenses, network assets, retail stores and approximately 8.6 million subscribers.

After the Iusacell acquisition, AT&T will compete with America Movil not only in the Mexican phone market but also in the pay-TV market of several Latin American countries, where AT&T owned DIRECTV Latin America rivals with America Movil's Claro.

Iusacell offers wireless service under both the Iusacell and Unefón brand names with a network that today covers about 70 percent of Mexico’s approximately 120 million people. AT&T plans to expand Iusacell’s network to cover millions of additional consumers and businesses in Mexico.

“Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country’s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest,” said Randall Stephenson, AT&T chairman and CEO.

“Iusacell gives us a unique opportunity to create the first-ever North American Mobile Service area covering over 400 million consumers and businesses in Mexico and the United States. It won’t matter which country you’re in or which country you’re calling – it will all be one network, one customer experience,” added Stephenson.

Iusacell will continue to be headquartered in Mexico City following the transaction closing.The transaction is subject to review by Mexico’s telecom regulator IFT (Instituto Federal de Telecomunicaciones) and Mexico’s National Foreign Investments Commission. AT&T expects the transaction to close in the first quarter of 2015.

With this acquisition, AT&T continues expanding in Mexico after the company bought DirectTV for US$ 48.5 billion dollars earlier this year. DirecTV also provides satellite television services in Latin America. After the Iusacell acquisition, AT&T will compete with America Movil not only in the Mexican cell phone market, where America Movil has the Telcel brand, but AT&T owned DirecTV Latin America will also compete in the pay-TV market of several Latin American countries with America Movil owned Claro.

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